Tuesday, December 6, 2011

Is there a tax benefit to getting paid one lump for acrued vacation?

Or is it better to take it as if it were just like a normal vacation? I am leaving a company and have 3 weeks given to me this year. Would I be taxed differently if the company just paid me the 3 weeks in one lump?|||There's no benefit. It's just like another paycheck, just as if you were actually there working.





The only way there would be a benefit would be if you're just a hair away from a lower tax bracket, postponing the lump sum payment until the following tax year would possibly keep you in that lower bracket, letting you pay less taxes for that year. It would however, be tacked on to the following year's income.





But that's only like if you're planning to leave at the end of the year, etc. A company's not going to hold your vacation check for you.





I'd take the money and run. :)|||The only time it would make a difference in taxes is if some of the money hit a different tax year.





For example, if you are paid paycheck by paycheck, any paycheck received in January would be on a different tax year than a check received in December.|||no diff...............taxes are annual

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